THE BOND PROPOSAL WILL NOT CHANGE THE DISTRICT Tax Rate
STATE LAW REQUIRES “PROPERTY TAX INCREASE” LANGUAGE ON BALLOT FOR BOND PROPOSITIONS.
In compliance with a new state law, bond ballot propositions must include the following statement: THIS IS A PROPERTY TAX INCREASE. As a result of this new requirement, voters in LEISD will see this language when they vote; however, the LEISD tax rate is not projected to increase as a result of the bond election.
HOW IS THE DISTRICT ABLE TO ISSUE NEW BONDS WITHOUT RAISING THE RATE?
The main factor that allows LEISD to issue new bonds without raising the Interest & Sinking (I&S) tax rate is growth in the district’s Taxable Assessed Value (TAV). The amount of taxes levied by LEISD are calculated by multiplying the tax rate set by the district by the taxable value of the property within the district. The taxable values are set by the county appraisal districts. The district’s TAV increases each year as new commercial and residential development takes place. This additional tax base will generate more tax revenue, even if the tax rate remains the same.
THEN WHY IS THIS “PROPERTY TAX INCREASE” LANGUAGE REQUIRED?
State law now requires this language on all school bond referendums.
tax information
Public school taxes involve two figures, which divide the school district budget into two “buckets.” The first bucket is the Maintenance and Operations budget (M&O), which funds daily costs and recurring or consumable expenditures such as teacher and staff salaries, supplies, food and utilities. Approximately 78 percent of the district’s M&O budget goes to teacher and staff salaries. The second bucket is the Interest and Sinking budget (I&S), also known as Debt Service, and that is used to repay debt for longer-term capital improvements approved by voters through bond elections.
Proceeds from a bond issue can be used for the construction and renovation of facilities, the acquisition of land and the purchase of capital items such as equipment, technology and transportation. I&S funds cannot by law be used to pay M&O expenses, which means that voter-approved bonds cannot be used to increase teacher salaries or pay rising costs for utilities and services.
Little Elm ISD Tax Rate HISTORY
Little Elm ISD’s I&S tax rate is $0.47, and the M&O tax rate is $0.94, for a total tax rate of $1.41 per $100 of certified property value.
This chart shows the district’s tax rate over the past 12 years. The current total rate of $1.4129 is 13 cents less than the rate 10 years ago.
The LEISD tax rate is not expected to increase as a result of the 2022 bond election.
Impact on Senior Citizens’ Property Taxes
Little Elm ISD property taxes for citizens age 65 or older would not be affected by this or any LEISD bond election as long as a homestead and over 65 exemption application have been filed with the local appraisal district.
According to state law, the dollar amount of school taxes imposed on the residence homestead of a person 65 years of age or older cannot be increased above the amount paid in the first year after the person turned 65 – regardless of changes in tax rate or property value – unless significant improvements are made to the home.
For more information on the over 65 exemption, visit the Denton County Tax Assessor’s website.
Bond Rating
Little Elm ISD has a bond rating of AA, which is considered to be in the high grade / high quality rating category.
Bond Refunding
The Little Elm ISD Board of Trustees has taken advantage of bond refunding opportunities, which allows the District to exchange its higher-interest debt for that of a lower rate. Through bond refunding, Little Elm ISD has saved approximately $30 million in six years.
Read more about the District’s focus on Financial Transparency.